NAB Proposes Helping Minorities, Majority

The National Association of Broadcasters has weighed in on the Federal Communications Commission's inquiry into making it easier for small businesses, women and minorities to get a piece of spectrum-based services. Both of its principal suggestions have the added benefit of helping established broadcasters in the bargain.

NAB's suggestions: 1) Restore tax incentives that give established broadcasters tax breaks or other benefits when they sell stations to minorities or women and 2) Repeal the "equity/debt plus" attribution rule that makes any debt or equity position in a broadcast property of more than 33% attributable toward station ownership limits.

Congress eliminated the FCC's tax certificate policy in 1995 after abuses by companies that brought in minority partners who had to put up only a fraction of the purchase price, then would be bought out soon after by their majority partners.

FCC Chairman Michael Powell has supported reinstating the tax certificate policy, which could include new loophole safeguards, like requiring minority owners to hold the stations for a year or two before being allowed to sell them.

NAB supported a bill introduced by Senator John McCain (R-Ariz.) in 2003 that would provide tax breaks to sales of stations to "socially and economically disadvantaged" small businesses.

In 1999, FCC changed the rules to make smaller stakes count toward ownership limits. NAB argues that by making stakes of a third or higher attributable, the FCC "discourages investment by existing broadcasters (or by newspapers) in new entrants, including minorities and women, because more investments--including those of pure debt--are attributable."

NAB also cited some ongoing industry initiatives to encourage minority entrants, including the Gateway Fund For Diversity in Broadcasting and the Broadcast Leadership Training Program.